For the third time this year, the RRR cut was targeted to support small and medium-sized banks, and small and medium-sized enterprises welcomed more low-cost funds

2020-04-05T09:21:28.657Z

There are nearly 4,000 small and medium-sized banks that have received targeted RRR cuts, which are numerous and widely distributed, and are an important force serving small and medium-sized enterprises. Further reducing the deposit reserve ratio of small and medium-sized banks will increase the financial strength of small and medium-sized banks, help guide them to issue loans to small and medium-sized enterprises at a more favorable interest rate, and expand the credit supply of agriculture-related, foreign trade and industries that are more severely affected by the epidemic. Strengthen the support for the recovery and development of the real economy-

On April 3rd, the standard was lowered for the third time this year. The People's Bank of China has decided to lower the deposit reserve ratio by 1 percentage point for rural credit cooperatives, rural commercial banks, rural cooperative banks, rural banks, and urban commercial banks operating only in provincial administrative regions. At the same time, the central bank also decided to lower the interest rate on excess deposit reserves.

Why are there two targeted downgrades in three weeks? What role will targeted support for small and medium banks play? What is the impact of lowering the excess deposit reserve interest rate? In response to the above issues, a reporter from the Economic Daily interviewed industry experts.

Intensive RRR cuts support the real economy

Since the beginning of this year, the frequency of standard reduction has been significantly increased. Following the two RRR cuts in January and March this year, the central bank again implemented targeted PR cuts in April.

"This high frequency of RRR cuts not only reflects the gradual force of counter-cyclical regulation, but also illustrates the urgency of the prevention and control of the new coronary pneumonia epidemic and economic recovery." Wen Bin, chief researcher of China Minsheng Bank, said that the current epidemic has accelerated worldwide. Although the domestic epidemic prevention and control situation is improving, the downward pressure on the economy is large, and small, medium and micro enterprises are facing greater difficulties in production survival. If these problems are not resolved, it will affect all aspects of employment livelihood and social stability.

According to the relevant person in charge of the central bank, the targeted RRR cut will be implemented in place on April 15 and May 15 to prevent liquidity accumulation caused by a one-time release and ensure that all funds received by the RRR cut small and medium banks will be charged at a lower interest rate Invest in small, medium and micro enterprises. It can release about 400 billion yuan of long-term funds, and each small and medium-sized bank can obtain about 100 million yuan of long-term funds on average, effectively increasing the stable source of funds for small and medium-sized banks to support the real economy, and reducing the cost of bank funds by about 6 billion yuan per year. It is conducive to reducing the actual interest rate of loans for small and micro enterprises and private enterprises and directly supporting the real economy.

After the RRR cut, the deposit reserve ratio of small and medium-sized institutions will drop to historical lows. The deposit reserve ratio of more than 4,000 small and medium deposit financial institutions has been reduced to 6%. The person in charge of the central bank said that from the perspective of China's history and the situation in developing countries, the 6% deposit reserve ratio is a relatively low level.

Support small and medium-sized banks to focus on small and micro enterprises

Liu Guoqiang, deputy governor of the central bank, said that small and medium-sized banks are widely distributed, rooted at the grassroots level, and are inherently inclusive. Implementing a low deposit reserve ratio for small and medium-sized banks is an important measure to promote structural reforms on the financial supply side. Through reform, the financial supply structure and credit fund allocation are optimized to support small and medium-sized banks to better focus on small and medium-sized enterprises and increase credit supply. , Reduce financing costs and serve the real economy.

There are nearly 4,000 small and medium-sized banks that have received targeted RRR cuts, which are numerous and widely distributed, and are an important force serving small and medium-sized enterprises. Further reducing the deposit reserve ratio of small and medium-sized banks will increase the financial strength of small and medium-sized banks, help guide them to issue loans to small and medium-sized enterprises at a more favorable interest rate, and expand credit allocation for agriculture, foreign trade, and industries affected by the epidemic. Strengthen support for the recovery and development of the real economy.

Li Jianjun, the chief researcher of China Business Think Tank, believes that the targeted reduction of standards for small and medium-sized banks is to ensure that new loans can quickly and smoothly reach the hands of enterprises and relieve the urgent needs of enterprises. In the process of resuming production and resuming production, ensuring sufficient liquidity of the enterprise can provide guarantee for the subsequent recovery and expansion of production and resumption of employment, prompting the economic recovery to speed up, and reducing the impact of the epidemic on the economic cycle.

Wen Bin believes that with the targeted downgrade, the loan scale of small and medium-sized banks in areas such as "agriculture, rural areas", private enterprises and small and micro enterprises will be further expanded, which will also increase capital demand. Next, small and medium-sized banks should be supported to replenish capital through multiple channels to increase their capital strength and ensure the stable and healthy development of small and medium-sized banks.

Incentivize banks to increase credit availability

It is worth noting that the People's Bank of China has decided to reduce the interest rate on excess deposit reserves of financial institutions in the central bank from 0.72% to 0.35% as of April 7. This is the first time in 12 years that the central bank has adjusted the excess deposit reserve interest rate.

Excess reserve is the money that depository financial institutions voluntarily deposit in the central bank after paying the statutory reserve, which is at the discretion of the bank, and can be used for liquidation and cash withdrawal at any time. The People's Bank of China pays interest on excess reserves, and its interest rate is the excess reserve interest rate. It has not been adjusted since 2008 when it was reduced from 0.99% to 0.72%.

Chen Ji, a senior researcher at the Bank of Communications Financial Research Center, believes that the central bank will reduce the excess reserve interest rate from 0.72% to 0.35% in the hope that the long-term low-cost funds invested by the RRR cut can be used to support the real economy, rather than obtain liquidity After the support continued to deposit back to the central bank, resulting in liquidity siltation. This move can promote banks to improve the efficiency of capital use, and promote banks to better serve the real economy.

"The reduction of the excess reserve interest rate will lower the credit interest rate through the interest rate transmission mechanism." Researcher Li Yiju of the Bank of China Research Institute believes that the purpose of the reduction of the excess reserve interest rate is to change the reserve structure and will not change the amount of liquidity. This lower interest rate will directly reduce the income of excess reserves of commercial banks, and encourage commercial banks to reduce the amount of excess reserves by increasing credit. In addition, the excess reserve interest rate serves as the lower limit of the interest rate corridor, and its decline will help the downward trend of the interest rate center of the money market, thereby reducing the credit interest rate through the interest rate transmission mechanism.

Monetary policy is more flexible and moderate

Next, how will monetary policy go?

On the basis of the RRR cut, a series of policies to support small and micro enterprises will also be implemented. Inclusive financial support measures for small and medium-sized enterprises in the executive meeting of the State Council also include an increase of 1 trillion yuan in refinancing refinancing for small and medium-sized banks, and support for financial institutions to issue 300 billion yuan of small and micro-finance financial bonds.

In addition, it will guide the net financing of corporate credit bonds by 1 trillion yuan more than last year, and broaden channels for low-cost financing for private and small and medium-sized enterprises; encourage the development of supply chain financial products such as order, warehouse receipts, and account receivable financing , Promote the financing of accounts receivables for SMEs by 800 billion yuan throughout the year; improve the loan risk sharing mechanism, encourage the development of commercial insurance products that increase credit for SMEs, reduce government financing guarantee rates, and reduce the comprehensive financing costs of SMEs burden.

Li Yiju said that the future monetary policy will remain flexible and appropriate. On the one hand, it provides guarantee for the gradual recovery of economic activities. On the other hand, monetary policy should escort the new growth point of the economy. With the gradual control of the epidemic situation, China's new industry and new economic development potential will continue to be released, the demand for credit in these areas will continue to increase, and monetary policy should also increase support for new areas of economic growth.

At the same time, we must pay more attention to guiding the downward cost of corporate financing, comprehensively use a variety of interest rate instruments to reduce the cost of commercial banks, and guide the downward interest rate of LPR to promote the reduction of financing costs of physical enterprises. In addition, properly adjust the scope of qualified collateral to encourage commercial banks to increase their support for the real economy.